Taekwang Group: "Embezzlement and breach of trust allegations are misconduct by former management"

Taekwang Group announced that the embezzlement and breach of trust allegations against former Chairman Lee Hojin have been confirmed as abuses of power and misconduct by the former management team.

On the 25th, Taekwang Group stated in a press release, "A thorough audit is currently underway at the group level regarding internal suspicions of embezzlement and breach of trust," adding, "The audit results confirm that the misconduct was committed by the former management team who managed the group during former Chairman Lee's absence."

[Image source=Yonhap News]

The Anti-Corruption and Public Crime Investigation Unit of the Seoul Metropolitan Police Agency is reportedly investigating allegations including the creation of slush funds through false salary payments and recoveries by Taekwang Group executives, the payment of 860 million KRW for golf practice range construction costs at Taekwang CC, and the private use of 80.94 million KRW from affiliate corporate credit cards.

In connection with this, the police conducted a search and seizure on the 24th at former Chairman Lee's residence, the Taekwang Group Management Council office, and Taekwang CC.

Taekwang Group stated, "Since early August, during audits of affiliates, internal misconduct was uncovered within TCIS, an affiliate responsible for real estate management and construction and leisure (golf course) businesses within the group," adding, "The Management Council held Kim Kiyu, CEO of TCIS, accountable and dismissed him, subsequently expanding the audit to all affiliates."

They further added, "During the period when the embezzlement and breach of trust allegations arose, former Chairman Lee was either incarcerated or had stepped down from frontline management," emphasizing, "He was not involved in day-to-day management at all."

Taekwang Group said, "We plan to actively cooperate by providing all necessary materials for the police investigation to fully uncover the truth behind the allegations," and "We will conduct a more thorough internal audit and immediately request investigations into the misconduct of the former management team."

Currently, to ensure the fairness of the audit, Taekwang Group has engaged the law firm Robax, which specializes in compliance monitoring and internal controls in corporate, financial, and IT sectors, to participate in the audit, conducting digital forensics and accounting audits.

A Taekwang Group official stated, "It appears that the abuses of power and misconduct by the former management team revealed in the internal audit have been distorted into embezzlement and breach of trust allegations against the former chairman and reported to the police," adding, "With both the internal audit and police investigation underway, the perpetrators and details of the misconduct will be revealed."

This content was produced with the assistance of AI translation services.